The MD of one of the largest container hauliers in the UK has warned that the pattern of business in the sector will “change dramatically” over the next 12 months when the London Gateway opens at the end of the year.

Speaking as the haulier unveiled a 6.5% year-on-year increase in turnover and a 45% increase in pre-tax profit Chris Lawrenson, MD of Pentalver Group, said operators in the container market would have to change in order to survive.

Pentalver, which is a subsidiary of Danish shipping giant Maersk, posted a turnover of £60.7m in the year-ending 31 December 2012, up from £57.4m in 2011, and a pre-tax profit of £2.9m, compared to £2m in 2011.

He told “With the advent of London Gateway later this year and consolidation within the container shipping market there is no doubt that the pattern of business in the UK will change dramatically over the next 12 months.

“The ability to change to meet the customer requirements is paramount to surviving. Continually looking at opportunities to improve and add services to our business will keep Pentalver as a major supplier within the sector,” he added.

Significant development

London Gateway, owned by DP World will be the first new container port in the UK in 20 years when it opens in Q4. It is being built on the former Shell Haven oil refinery location at Stanford-le-Hope, Essex.

However, Lawrenson warned: “Already 2013 is proving to be as difficult as 2012. There is no doubt that there will be more casualties within our sector as a result of market competition and rates that cannot be sustained.”

He said he was  pleased with the progress that has been made in Pentalver Transport  during 2012 given the market conditions, as the operator diversified its business from core container activities adding offerings such as container sales, container conversions and project cargo.

“We have seen competitors acting very much in the short term offering rates to the market that cannot be maintained and are meant purely to keep assets busy,” he said. “ During 2012 Pentalver invested over £3m in container handling equipment and replaced our entire fleet of vehicles in Southampton to Euro-5 Mercedes’.”

This fleet refresh was for 30 units, and also saw it take delivery of 50 Euro-5 Scania’s.

Location, location

This year Pentalver has relocated its Tilbury facility, which it says will allow for a more efficient operation, while in Southampton it will now offer heavy haulage services.

Pentalver Transport subsidiary Pentalver (Cannock) struggled in 2012, seeing turnover fall to £23.9m, from £24.8m in 2011, and a pre-tax profit of £246,000 turn into a pre-tax loss of £195,000.

Lawreson described 2012 as a “transition year” for Pentalver Cannock, adding that the results did not reflect the work and effort that went into the huge changes that have taken place in the business.

“We have seen how difficult it is in the transport sector, and Pentalver suffered much the same as the rest of the industry.  We came into 2013 a lot stronger and have invested heavily in the future.”

As far as 2013 performance goes Lawreson reveals that Pentalver has  retained all its 2012 contracts “in spite of extreme rate pressure from the market”.

“In the first half of 2013 we have increased turnover by 8% in comparison to same period in 2012 and improved profitability accordingly,” he adds.  “We have secured two additional major contracts, one retail and one industrial for the next 12 months and re-signed an existing retail contract for another 12 months.”